Demonstrate the ROI of Search Marketing

James Lamberti

As we head toward Searchnomics 2007 on June 27, I’d like to share with you some more thoughts on the future of search marketing.

Branding is a big issue for the search industry and could potentially change the economics of search. Brand-building ad dollars are a huge part of media spending and an attractive market for us as an industry. However, the direct response ecosystem we’ve built makes it hard to adapt to the measurement needs of brand marketers. So what can we do to demonstrate search’s effectiveness to brand marketers and capture these dollars? (Let’s leave aside for a moment the debate over the ability to brand via search – I will come back to that in a later post.)

The most classic and rigorous approach to measuring ROI is to test the effectiveness of a search campaign in driving classic branding measures like awareness, purchase intent, and likelihood to recommend. Using a classic test/control approach, this is the best way to convince a major national advertiser of the value of search in branding. Be warned – not all campaigns will succeed on these measures! That said, in the past year, 75% of search brand tests conducted by comScore showed a significant lift in at least one of the branding metrics. Message association was most often impacted (75%), but awareness and purchase intent were improved 50% of the time. There are a few common threads running through the successful campaigns: integration with other forms of media both online and offline, the “creativity” behind the keyword selection, including integration with the brand communication or creative elements in the offline media, and the size and reach of the campaign.

While major marketers will expect this classic type of testing design, there are alternatives for measuring smaller campaigns. Traditionally, we in the industry shy away from the use of reach and frequency metrics to evaluate search campaigns. For example, I frequently hear the phrase: “search is not a reach vehicle.”

My answer to that is “who are you trying to reach?” If you want to reach the total U.S. Internet population or some major demographic within it, then yes – search will not achieve reach in the same way as TV, Print, Radio or Digital Image campaigns. In fact you will be lucky to reach 1% or 2% of those broad targets using search. But if you are trying to reach, for example, the 15 million consumers who buy a PC in a quarter., search offers one of the most effective, if not the most effective, means of reaching your target audience.

Here’s a rough example for all you numbers people:

~ 15 Million PCs Bought in a Quarter~ 7 Million People Searched on “Computers” or “Laptops”= 47% Reach of Search Among Likely “In-Market” Computer Buyers

Can you think of a TV campaign that has that type of reach within a target segment of prospective buyers? Imagine if the industry began reporting search campaigns in this manner? You would get the attention of the CMO of a branding team in a hurry. You’re speaking her/his language and presenting search marketing efforts using data comparable to the offline world. A discussion using reach, frequency, gross rating points (GRP), and impact on awareness / purchase intent is far more likely to engage the brand marketers than keyword lists, natural and paid-click rates, or direct response ROI calculations. We have the data to speak their language – let’s use it!